Fitch Rates Conn's Receivables Funding 2016-B, LLC

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has assigned the following ratings to Conn's Receivables
Funding 2016-B, LLC (Conn's 2016-B), which consists of notes backed by
retail loans originated and serviced by Conn Appliances, Inc. (Conn's):

--$391,840,000 class A notes at 'BBBsf'; Outlook Stable;

--$111,960,000 class B notes at 'BBsf'; Outlook Stable;

--$48,980,000 class C notes at 'Bsf'; Outlook Stable;

--Class R notes at 'NRsf'.

KEY RATING DRIVERS

Collateral Quality: The 2016-B trust pool consists of 100% fixed-rate
consumer loans originated and serviced by Conn's Appliances, Inc. The
pool exhibits a weighted average FICO score of 608 and a weighted
average borrower rate of 21.52%.

The base case default rate for the 2016-B pool is assumed to be 24.75%
and Fitch applied a 2.2x stress at the 'BBBsf' level, reflecting the
high absolute value of the historical defaults, along with the
variability of default performance in recent years and the high
geographic concentration.

Rating Cap at 'BBBsf': Due to higher loan defaults in recent years,
management changes at Conn's, and the credit risk profile of Conn's,
Fitch placed a rating cap on this transaction at the 'BBBsf' category.

Dependence on Trust Triggers: The trust depends on the three trust
triggers - the cumulative net loss trigger, the annualized net loss
trigger, and the recovery trigger - in order to ensure the payments due
on the notes during times of degrading collateral performance.

Liquidity Support: Liquidity support is provided by reserve account
which will be fully funded at closing at 1.50% of the initial pool
balance. The reserve account will step down to 1.25% of the original
collateral balance once overcollateralization (OC) reaches 30% of the
current collateral balance and will step down to 1.00% of the original
collateral balance once OC reaches 40% of the current collateral balance.

Servicing Capabilities: Conn Appliances, Inc. has a long track record as
an originator, underwriter, and servicer. The credit risk profile of the
entity is mitigated by the backup servicing provided by Systems &
Services Technologies, Inc. (SST).

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults or chargeoffs on
customer accounts could produce loss levels higher than the base case
and would likely result in declines of credit enhancement (CE) and
remaining loss coverage levels available to the investments. Decreased
CE may make certain ratings on the investments susceptible to potential
negative rating actions, depending on the extent of the decline in
coverage.

Fitch conducts sensitivity analysis by stressing a transaction's initial
base case chargeoff assumption by 1.5x, 2.0x, and 2.5x, and examining
the rating implications. The 1.5x, 2.0x, and 2.5x increase of the base
case chargeoffs are intended to provide an indication of the rating
sensitivity of the notes to unexpected deterioration of a transaction's
performance.

During the sensitivity analysis, Fitch examines the magnitude of the
multiplier compression by projecting the expected cash flows and loss
coverage levels over the life of investments under higher than the
initial base case chargeoff assumptions. Fitch models cash flows with
the revised chargeoff estimates while holding constant all other
modeling assumptions.

Under the 1.5x base case stress scenario, class A notes would retain the
current rating, while class B notes would experience a one-notch
downgrade. Under the 2.0x base case stress scenario, class A notes would
be downgraded one notch, while class B notes would downgraded one
category to 'Bsf'. Under the 2.5x base case stress scenario, class A
notes would be downgraded to 'B+sf', and class B and class C notes would
fall to 'CCCsf'.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in
relation to this rating action.

REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS

A description of the transaction's representations, warranties and
enforcement mechanisms (RW&Es) that are disclosed in the offering
document and which relate to the underlying asset pool is available by
accessing the appendix referenced under "Related Research" below. The
appendix also contains a comparison of these RW&Es to those Fitch
considers typical for the asset class as detailed in the Special Report
titled "Representations, Warranties and Enforcement Mechanisms in Global
Structured Finance Transactions," dated May 31, 2016.

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